The Northern Care Alliance NHS Foundation Trust has launched a mutually agreed resignation scheme, which it says is aimed at creating efficiencies and reducing costs to ensure that it can continue to provide good standards of care to its patients.
In this blog we explore how the scheme will operate, and we will explain how our specialist Employment Team can help employees who need independent legal advice on their MARS settlement agreement.
What is a Mutually Agreed Resignation Scheme?
A mutually agreed resignation scheme (‘MARS’) is a form of voluntary severance, designed to enable employees, in agreement with their employer, to choose to leave their employment in return for a severance payment. Job vacancies are created which do not need to be replaced, or which create an opportunity to redeploy staff from other roles which then do not need to be replaced.
How does the NCA MARS work?
Timescales
The current NCA MARS invites applications from eligible employees until 01 June 2025. Employees whose applications are accepted will leave their roles on a mutually agreed date, which will be no later than 22 September 2025.
Eligibility
Applicants must have no less than 1 year’s continuous NHS service to be eligible for a MARS payment.
In addition, the following employees will not normally be allowed to exit under the MARS:
- Employees who confirmed their resignation or retirement before 14 May 2025.
- Employees who have already secured new employment.
- Employees who have already been given a termination date for their employment for another reason.
- Employees undergoing a performance management procedure to address poor performance.
- Employees undergoing a conduct/disciplinary procedure; and
- Employees currently in a selection pool for potential redundancy.
Calculation of Severance Payment
Severance payments under the current NCA MARS are capped at £80,000 and will be calculated as follows:
| Length of Continuous NHS Service (completed years) | Payment |
|---|---|
| 1 years' continuous service | 3 months’ basic salary |
| 2 years' continuous service | 3 months’ basic salary |
| 3 years' continuous service | 3 months’ basic salary |
| 4 years' continuous service | 3 months’ basic salary |
| 5 years' continuous service | 3 months’ basic salary |
| 6 years' continuous service | 3 months’ basic salary |
| 7 years' continuous service | 3.5 months’ basic salary |
| 8 years' continuous service | 4 months’ basic salary |
| 9 years' continuous service | 4.5 months’ basic salary |
| 10 years' continuous service | 5 months’ basic salary |
| 11 years' continuous service | 5.5 months’ basic salary |
| 12 years' continuous service | 6 months’ basic salary |
| 13 years' continuous service | 6.5 months’ basic salary |
| 14 years' continuous service | 7 months’ basic salary |
| 15 years' continuous service | 7.5 months’ basic salary |
| 16 years' continuous service | 8 months’ basic salary |
| 17 years' continuous service | 8.5 months’ basic salary |
| 18 years' continuous service | 9 months’ basic salary |
| 19 years' continuous service | 9.5 months’ basic salary |
| 20 years' continuous service | 10 months’ basic salary |
| 21 years' continuous service | 10.5 months’ basic salary |
| 22 years' continuous service | 11 months’ basic salary |
| 23 years' continuous service | 11.5 months’ basic salary |
| 24 years' + continuous service | 12 months’ basic salary |
In this calculation, basic salary means basic annual salary excluding allowances and overtime at the termination date, and any subsequent back pay or pay rises will not be included.
The severance payment does not include notice pay because successful applicants will be expected to work until the agreed termination date, and they will be paid as normal during this time.
Additional Considerations
It is crucial that anyone considering applying under the current NCA MARS should consider and seek advice on all the potential implications for them if their application is successful, including:
The NCA MARS terms envisage that an employee leaving under the scheme will not be reemployed by the Trust within 12 months of the termination date. Therefore:
- Re-employment in the NHS within one month of the termination date will lead to the severance payment being repayable.
- Re-employment in the NHS within six months of the termination date and before the expiry of the period they have been compensated for will lead to the unexpired element of the severance payment being repayable.
As the NCA MARS is voluntary, the reason for leaving will be recorded as ‘Mutually Agreed Resignation Scheme’. There is a possible loss of entitlement to welfare benefits and mortgage protection insurance, there may be an impact on pensions, lease car penalties may be triggered, and there may be implications for those with multiple contracts with the NHS.
Outcome of applications under the NCA MARS
As the NCA MARS is a voluntary process, there is no automatic entitlement to a payment under the scheme, the Trust reserves the right to decide whether any application is approved or not, and there is no right to appeal.
Successful applications will be subject to the employee obtaining independent legal advice and signing a settlement agreement to confirm their acceptance of the MARS terms.
What is a settlement agreement?
A settlement agreement is a legally binding contract between an employer and an employee that ends the employment on agreed terms. They notably include the employee making a binding promise not to sue the employer and a payment being made to the employee.
The NCA MARS terms state that employees must receive legal advice on the settlement agreement from a qualified solicitor or legal advisor. Employees have the right to secure their own independent legal advice on their MARS settlement agreement, and they are not required to use the Trust’s nominated solicitor or their union’s solicitor. The NCA will pay up to £400 plus VAT for each employee to secure independent legal advice. With the current NCA MARS settlement agreements, this contribution will cover the full cost of the advice so the employee will not have to pay anything themselves.
Contact our specialist MARS settlement agreement solicitors
The Employment Team at O’Donnell Solicitors has specialist knowledge and experience in helping employees to navigate mutually agreed resignation schemes and in providing the necessary independent legal advice on MARS settlement agreements.
We offer rapid appointments and a quick turnaround to ensure matters are concluded as time and cost efficiently as possible.
If you would like to speak to one of our employment solicitors about a MARS settlement agreement, please contact the Employment Team at 0161 503 5449 or e-mail Kenneth.Lees@odonnellsolicitors.co.uk.
